Feds Launch Criminal Probe of Oil Spill, BP Stock Plummets
BP stock drops 15%, sheds $20 billion in value, as the market reacts to the continuing turmoil in the aftermath of the Gulf of Mexico oil spill.
U.S. Attorney General Eric Holder announced that the Justice Department has launched a criminal probe of the BP oil spill. “We will prosecute to the fullest extent of the law anyone who has violated the law,” Holder told reporters today in New Orleans. “We will not rest until justice is done.”
Federal agencies, including the FBI, are participating in the probe.
Among the many statutes the DOJ is reviewing are:
- The Clean Water Act, which carries civil penalties and fines as well as criminal penalties;
- The Oil Pollution Act of 1990, which can be used to hold parties liable for cleanup costs and reimbursement for government efforts;
- The Migratory Bird Treaty Act and Endangered Species Acts, which provide penalties for injury and death to wildlife and bird species; and,
- Other traditional criminal statutes.
“There is one thing I will not let be forgotten in this incident: In addition to the extensive costs being borne by our environment and by communities along the Gulf Coast, the initial explosion and fire also took the lives of 11 rig workers. Eleven innocent lives lost,” Holder said in a prepared statement. “As we examine the causes of the explosion and subsequent spill, I want to assure the American people that we will not forget the price those workers paid.”
According to government estimates, the spill has already leaked between 20 and 44 million gallons of oil.
“If we find evidence of illegal behavior, we will be forceful in our response,” he said.
The Justice Department has already demanded that the involved parties, including BP, Transocean and Halliburton, preserve all documents related to the disaster.
The aftermath of the April 20 explosion which took place on the BP-operated Horizon Deepwater rig was labeled as the “greatest environmental disaster of its kind in our history” by President Barack Obama today.
The companies involved in the oil spill witnessed a sharp selloff of their shares today in response to the criminal probe. BP and Halliburton each suffered a loss of nearly 15 percent, while Transocean saw their shares plummet nearly 12 percent.
BP shares have fallen 40 percent since the explosion, erasing nearly $75 billion of value in the process. Shares in BP shed $20 billion today alone.
Analysts estimate that BP will suffer between $4 billion to $25 billion in losses when all is said and done. The total bill will vary greatly depending on the length of time it takes to cap the spill.